Liberalised Remittance Scheme Basics: Global Equity Diversification for Indians in 2026

The Liberalised Remittance Scheme lets resident individuals remit up to the USD limit notified by the Reserve Bank in a financial year for permitted current account transactions, including overseas investments that are allowed under FEMA and related rules, through authorised dealers. The cap is per person and includes all remittances under LRS in that year, so education fees, family maintenance, and investments share one bucket.

Tax Collected at Source and cash flow

Certain LRS remittances attract tax collected at source at rates and thresholds that Parliament notifies from time to time. TCS is not the same as final tax; you adjust it against liability at filing, but the upfront cash still leaves your bank. Model any offshore ETF purchase as purchase price plus TCS plus bank cable charges so you do not break monthly cash discipline.

Reporting, forms, and compliance

Your bank will collect KYC, Form A2, and declarations for purpose code. Keep copies with your CA. If you become non resident or RNOR, the entire reporting map changes; do not rely on generic social media threads written for salaried residents in Bengaluru.

Sizing global equity sensibly

Most Indian households should fully fund EPF or NPS where chosen, emergency cash, India goal portfolios, and term or health premiums before building large offshore thematic sleeves. Currency moves both ways; a US tech ETF can fall in rupee terms even when Nasdaq rises.

Product routes

You may invest offshore via LRS through supported brokers, or gain partial exposure through Indian feeder funds that hold underlying global funds. Each route has cost, tracking error, and tax nuances; compare total expense and exit rules, not only the ticker story.

Conclusion

Treat offshore allocation as a satellite sleeve until your core India corpus can absorb currency volatility without derailing goals.

Nakotra Financial Advisor discusses whether satellite global exposure fits your timeline and paperwork tolerance before you initiate the first transfer.